The 583 people were assessed as needing nursing home care but the rate at which funding was released under the scheme meant they were put "on hold".

It is understood many of these were in acute hospitals where they were occupying scarce beds, while others had to pay the full weekly nursing costs of around €1,200 with no refund.

The HSE said since the beginning of the year about 200 people a week who are approved for the scheme under assessment will have the funding delayed for about two weeks.

This is in contrast to the early phase of the scheme when funding was quickly released and people could backdate claims for refunds for nursing home fees.

Junior Health Minister Kathleen Lynch said that about 2,700 of the 10,671 received under the scheme last year were withdrawn.

It ran into financial trouble last June and had to receive a bailout.

It means that assessments are now stricter and more efforts will be made to provide care for people in their own homes.

The minister admitted that the drive to reduce the number of people "inappropriately" admitted to nursing homes is likely to be felt by people applying for the Fair Deal scheme this year.

Nursing Homes Ireland, which represents private nursing homes, called on the HSE to prioritise applications and accelerate the approval process under the Fair Deal scheme.

It pointed out that 771 beds in acute hospital wards were being occupied by 'delayed discharge' patients at the end of January.

Delay

Chief executive Tadhg Daly said homeowners across the country were reporting very lengthy waiting times for the processing of applications under the Fair Deal scheme.

"People in need of nursing home care are, in many cases, waiting a number of months for their application to be approved," said Mr Daly.

"This inordinate delay means hundreds of people are occupying acute hospital beds unnecessarily and the care they are receiving in such facilities is being provided at a greater cost to the taxpayer than the care that is more suited to their needs in the community care settings of nursing homes," he said.

The HSE rejected the claims about delays saying applications generally took between "four and six weeks to complete".